Construction and Engineering firms looking to grow and thrive in uncertain times need to prepare for multiple economic scenarios, learn how to leverage technology and innovation, promote (and improve) their unique culture and attract the right talent. To ensure a firm is heading in the right direction, firm owners need to design and implement a strategic plan that works.
Typical strategic planning does not meet the needs of the volatile environment of the 21st century. In order to grow and thrive, firms must step out of a deterministic mindset and become the type of business that can react appropriately to a variety of significant, continuously evolving drivers. Scenario planning gives firms an opportunity to get ahead of the changing drivers that pose a risk to their business. It also helps business owners better define their goals, become more proactive (and make fewer crisis-mode decisions), and ultimately, strengthen their position in the marketplace.
To begin scenario planning for your firm, you must document your firm’s goals. First, segment your goals by the functions of your business. Here are some segments to consider:
- Client Service
Next, ensure your goals cohesively support your organization’s mission statement. If your firm doesn’t have a mission statement, make this your top priority.
As you define your company’s goals, make sure they are objective and specific. Your goals are a living, breathing document that will evolve with your business and plan. Be sure to review your goals on a semi-to annual basis and make any relevant adjustments to your mission statement.
Planning for the future
Once you’ve identified your goals, you can move on to how you are going to accomplish those goals. Begin by assessing your firm’s performance with a SWOT (strengths, weaknesses, opportunities, threats) analysis.
Be honest here. Don’t inflate, don’t protect. What do you do really well?
Common strengths: diversity of jobs, project management, talent
Be critical. Always ask, “where is there room to improve?”
Common weaknesses: singular focus, talent, project completion times
What can you leverage in your market?
Common opportunities: anticipating market changes, specialization
What could potentially damage your company?
Common threats: economy, cost structure, market preferences
Once you’ve established your firm’s goals, adjusted your mission statement and performed a SWOT analysis, it is time to look at scenario planning.
As a business owner, keeping a few steps ahead of the game will help safeguard your goals. By evaluating a range of possible outcomes and scenarios, and by developing a strategic response for each, construction businesses can anticipate industry shifts, minimize boom-to-bust reactions and ensure growth for years to come.
Scenario planning challenges firms to look at myriad forces, such as local environments, and international trends, as well as economic, political, environmental, social, global and technological drivers. Forward-thinking firms must avoid the temptation of siloing scenarios into best-case and worst-case plans. In order to succeed, businesses must think outside the box. Scenario plans that explore possible directions the future and acknowledge the complexity and dynamic nature of the real world deliver the best strategies for growth and contingencies for loss.
As with any endeavor, the success of scenario planning depends on what you put into it. Give the planning process the attention it requires. Either set aside time to do it yourself or assemble a team that is fluent in your current markets, geographic issues, client pressures, and supply concerns. This team will be responsible for identifying the implications of certain trends, building firm-specific scenarios and brainstorming potential strategies around each scenario. The team will then cross-reference each approach for commonalities and earmark common strategies for detailed implementation plans.
Beyond the plan
- As you go through the process of planning for various scenarios, go back to your SWOT analysis and see if your ability to meet the demands of less-likely contingencies reveal any unidentified weaknesses.
- Track your indicators as you go; this will help you make the necessary adjustments to your plan and better respond to scenarios.
- Scenarios can and should be updated. The passage of time will render some scenarios extinct; when this happens go back to the drawing board to address evolving drivers and issue scenarios.
- Invest in activities that will help you identify relevant indicators (industry dialogues, market studies, networking).
Putting your strategic plan into action is by far the most important step in planning for your construction firm’s future. Too often we see businesses with well-designed strategic plans fail to implement key components of those plans, thereby failing to reap the potential benefits of the planning process. Your strategies and implementation should become part of the DNA of your company. By changing your focus from a single outlook to an array of contrasting possible futures, you may notice things that were previously invisible, pick up on issues that weren’t on your radar and tap previously unseen opportunities. The professionals in our firm can assist you in developing and implementing your strategic plan. Call us today.